2. Financial intermediation

The purpose of this paper is to analyze the influence of credit, liquidity and operational risks in six Indonesian’s islamic banking financing products namely mudharabah, musyarakah, murabahah, istishna, ijarah and qardh, in order to try to discover whether or not Indonesian islamic banking is based on the “risk-sharing” system. This paper relies on a fixed effect model test based on the panel data analysis method, focusing on the period from 2007 to 2013. The research is an exploratory and descriptive study of all the Indonesian islamic banks that were operating in 2013. The results of this study show that the Islamic banking system in Indonesia truly has banking products based on “risk-sharing.” We found out that credit, operational and liquidity risks as a whole, have significant influence on mudarabah, musyarakah, murabahah, istishna, ijarah and qardh based financing. There is a correlation between the credit risk and mudarabah based financing, and no causal relationship between the credit risk and musharaka, murabahah, ijarah, istishna and qardh based financing. There is also correlation between the operational risk and mudarabah and murabahah based financing, and no causal relationship between the operational risk and musharaka, istishna, ijarah and qardh based financing. There is correlation between the liquidity risk and istishna based financing, and no causal relationship between the liquidity risk and musharaka, mudarabah, murabahah, ijarah and qardh based financing. A major implication of this study is the fact that there is no causal relationship between the credit risk and musharakah based financing, which is the mode of financing where the islamic bank shares the risk with its clients, but there is an influence of credit risk toward mudarabah mode financing, a financing mode where the Islamic bank bears all the risk. These findings can lead us to conclude that the Indonesian Islamic banking sector is based on the “risk sharing” system.

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The Future of Banking System and Economic Development in Nigeria

Annals of the Social Science Academy of Nigeria ◽

10.36108/ssan/1502.02.0130 ◽

2015 ◽

Vol 20 (1) ◽

Author(s):

Olu Ajakaiye ◽

M. Adetunji Babatunde

Keyword(s):

Economic Development ◽

Business Model ◽

Commercial Banks ◽

Banking System ◽

Bank Lending ◽

Real Sector ◽

The Real ◽

Access To Credit ◽

The Future ◽

Banking Business

This study examined the future of banking system and economic development in Nigeria in the context of the demand following hypothesis. Although, the Nigerian economy has witnessed steady growth, the productive base of the economy is narrow. This therefore requires that banks must engage in an effective financial intermediation process to aid the transformation of the real sector as an engine of growth. However, while the deposits mobilized and assets base of the commercial banks has increased in leap and bounds, the real sector access to credit is on the decline. Rather, the bulk of the funds are invested on government short term securities given their risk free characteristics which reflect the lazy bank syndrome. Prohibitively high cost of credit and existence of hidden charges also inhibit real sector access to commercial banks loan. Hence, to reconnect the banking system with the real sector, there is a need to discourage armchair banking business model and encourage supportive banking business model, lending and secure appropriate maturity profile of loans to the real sectors, promote modified collateral bank lending model, and encourage specialization of bank branches. These are expected to aid the growth of the real sector and fast track the process of economic development in Nigeria.

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Pengaruh risiko usaha terhadap rasio kecukupan modal inti (TIER 1) pada bank-bank kelompok buku 3 dan buku 4

Journal of Business and Banking ◽

10.14414/jbb.v7i1.1002 ◽

2019 ◽

Vol 7 (1) ◽

Author(s):

Adi Isa Ansori ◽

Herizon Herizon

Keyword(s):

Credit Risk ◽

Liquidity Risk ◽

Secondary Data ◽

Operational Risk ◽

Sampling Technique ◽

Financial Statements ◽

Market Risk ◽

Linear Analysis ◽

Tier 1 ◽

Bank Group

This study tried to determine the effect of liquidity risk measured by LDR and IPR, Credit risk measured by APB and NPL, market risk measured by IRR and PDN, operational risk measured by BOPO, and FBIR both simultaneously or partially. On Core CAR (TIER 1) in Bank group of book 3 and book 4. The sample was selected using purposive sampling technique, consisting of five banks such as PT Bank Negara Indonesia, PT Bank Maybank Indonesia, PT Bank Tabungan Negara, PT Pan Indonesia Bank, and PT Bank Permata. The secondary data were taken from published financial statements starting from first quarter 2010 until second quarter 2015. They were collected by documentation method and analyzed using linear analysis. The result shows that, partially, LDR, IPR, NPL, PDN, BOPO and FBIR have significant effect on Core CAR (TIER 1). Simultaneously, LDR, IPR, APB, NPL, IRR, PDN, BOPO, and FBIR, as represented by liquidity risk, credit risk, market risk, and operational risk partially have significant effect on Core CAR (TIER 1) in Bank group of book 3 and book 4.

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Are the Payments System and e-Banking in India Safer than in other SAARC Members?

International Journal of Information Security and Privacy ◽

10.4018/ijisp.2016040102 ◽

2016 ◽

Vol 10 (2) ◽

pp. 11-25

Author(s):

Rituparna Das

Keyword(s):

Information Technology ◽

Credit Risk ◽

Liquidity Risk ◽

Operational Risk ◽

Payment System ◽

Settlement Systems ◽

Computer Hacking ◽

Payments System ◽

Payments Systems ◽

The Way

This paper deals with the issues in the way the banks are managing risks in payments and settlement systems using netbanking within the legal frame of information technology in India compared to other SAARC members. It compared India with the SAARC members with respect to management of credit risk, liquidity risk and operational risk in the payment system. The findings are: (i) India, Pakistan and Nepal are stronger in managing all of aforesaid risks in their payments systems relative to the rest and (ii) India is the most permissive by nature as to the crime of computer hacking.

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Analysis of The Influence of Liquidity, Credit and Operational Risk, in Indonesian Islamic Bank’s Financing for The Period 2007-2013

Gadjah Mada International Journal of Business ◽

10.22146/gamaijb.8507 ◽

2015 ◽

Vol 17 (3) ◽

pp. 279 ◽

Cited By ~ 1

Author(s):

Ousmane Diallo ◽

Tettet Fitrijanti ◽

Nanny Nanny Tanzil

Keyword(s):

Credit Risk ◽

Causal Relationship ◽

Risk Sharing ◽

Banking Sector ◽

Panel Data Analysis ◽

Banking System ◽

Liquidity Risk ◽

Operational Risk ◽

Islamic Banking ◽

Islamic Bank

The purpose of this paper is to analyze the influence of credit, liquidity and operational risks in six Indonesian’s islamic banking financing products namely mudharabah, musyarakah, murabahah, istishna, ijarah and qardh, in order to try to discover whether or not Indonesian islamic banking is based on the “risk-sharing” system. This paper relies on a fixed effect model test based on the panel data analysis method, focusing on the period from 2007 to 2013. The research is an exploratory and descriptive study of all the Indonesian islamic banks that were operating in 2013. The results of this study show that the Islamic banking system in Indonesia truly has banking products based on “risk-sharing.” We found out that credit, operational and liquidity risks as a whole, have significant influence on mudarabah, musyarakah, murabahah, istishna, ijarah and qardh based financing. There is a correlation between the credit risk and mudarabah based financing, and no causal relationship between the credit risk and musharaka, murabahah, ijarah, istishna and qardh based financing. There is also correlation between the operational risk and mudarabah and murabahah based financing, and no causal relationship between the operational risk and musharaka, istishna, ijarah and qardh based financing. There is correlation between the liquidity risk and istishna based financing, and no causal relationship between the liquidity risk and musharaka, mudarabah, murabahah, ijarah and qardh based financing. A major implication of this study is the fact that there is no causal relationship between the credit risk and musharakah based financing, which is the mode of financing where the islamic bank shares the risk with its clients, but there is an influence of credit risk toward mudarabah mode financing, a financing mode where the Islamic bank bears all the risk. These findings can lead us to conclude that the Indonesian Islamic banking sector is based on the “risk sharing” system.

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Impact of Financial Risk on Financial Performance of Banks in Pakistan; the Mediating Role of Capital Adequacy Ratio

Journal of Accounting and Finance in Emerging Economies ◽

10.26710/jafee.v6i2.1184 ◽

2020 ◽

Vol 6 (2) ◽

Author(s):

Amir Rafique ◽

Muhammad Umer Quddoos ◽

Muhammad Hanif Akhtar

Keyword(s):

Credit Risk ◽

Financial Performance ◽

Financial Risk ◽

Liquidity Risk ◽

Operational Risk ◽

Capital Adequacy ◽

Mediating Role ◽

Basel Committee ◽

Capital Adequacy Ratio

Financial risk covers credit risk, liquidity risk and operational risk, which banks face during their operations and these risks have severe impact on profitability of banks. The Basel Committee for Banking Supervision (BCBS) introduces Capital Adequacy Ratio (CAR) to overcome uncertainties/ losses (Risk) to the banks. In this context, the aim of this study is to identify the Impact of financial risk on financial performance of commercial banks in Pakistan with mediating role of Capital Adequacy Ratio (CAR). The findings of the study show that credit risk and liquidity risk have a negative relationship with financial performance, whereas operational risk has a positive relationship with financial performance and capital adequacy ratio of the banks in Pakistan. This study is useful in devising the rules and regulations by the regulators (Basel Committee and State Bank of Pakistan) for risk measurement and management of banks.

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Are the Payments System and e-Banking in India Safer than in other SAARC Members?

Start-Ups and SMEs ◽

10.4018/978-1-7998-1760-4.ch085 ◽

2020 ◽

pp. 1646-1663

Author(s):

Rituparna Das

Keyword(s):

Information Technology ◽

Credit Risk ◽

Liquidity Risk ◽

Operational Risk ◽

Payment System ◽

Settlement Systems ◽

Computer Hacking ◽

Payments System ◽

Payments Systems ◽

The Way

This paper deals with the issues in the way the banks are managing risks in payments and settlement systems using netbanking within the legal frame of information technology in India compared to other SAARC members. It compared India with the SAARC members with respect to management of credit risk, liquidity risk and operational risk in the payment system. The findings are: (i) India, Pakistan and Nepal are stronger in managing all of aforesaid risks in their payments systems relative to the rest and (ii) India is the most permissive by nature as to the crime of computer hacking.

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Analisis Risk Profile dan Pengaruhnya Terhadap Tingkat Pengembalian Aset pada Perusahaan Perbankan BUMN yang Terdaftar Di Bursa Efek Indonesia Periode 2015 – 2019

J-MAS (Jurnal Manajemen dan Sains) ◽

10.33087/jmas.v6i1.254 ◽

2021 ◽

Vol 6 (1) ◽

pp. 281

Author(s):

Muhammad Ridho Almuhdhor

Keyword(s):

Credit Risk ◽

Linear Regression Analysis ◽

Liquidity Risk ◽

Operational Risk ◽

Market Risk ◽

Risk Profile ◽

Statistical Testing ◽

Significant Positive Effect ◽

Negative Effect ◽

Positive Effect

This study aims to analyze how the risk profile level of state-owned banking companies in the period 2015-2019 and test how it affects the rate of return of assets simultaneously and partially. This study uses census techniques that make all state-owned banking companies in the period 2015-2019 as a sample of research. By using multiple linear regression analysis tools and overall statistical testing (F test) and partial (t test), it can be concluded that based on the risk profile level of state-owned banking companies in the period 2015-2019, where Credit Risk shows state-owned banks on healthy criteria, Market Risk and Operational Risk shows state-owned banks on very healthy criteria while Liquidity Risk shows state-owned banks on fairly healthy criteria. Then based on simultaneous research Credit Risk, Market Risk, Liquidity Risk and Operational Risk have a significant positive effect on the return of assets, while partially Credit Risk has a negative effect insignificant, Market Risk and Liquidity Risk have a significant positive effect while Operational Risk has a significant negative effect on the return rate of assets.

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Risk management related to the use of payment systems

Economics. Finances. Law ◽

10.37634/efp.2021.7(1).6 ◽

2021 ◽

pp. 30-35

Author(s):

Vladislavа USYK ◽

Serhii VOITKO

Keyword(s):

Risk Management ◽

Credit Risk ◽

Liquidity Risk ◽

Payment System ◽

Management Policy ◽

Professional Activity ◽

Factor X ◽

Currency Risk ◽

Payment Systems ◽

Modeling Tools

Payment system is a complex system of managing funds transfers and settlements between economic entities, which ensures the rational implementation of the basic functions, uninterrupted financing of activities using the latest methods and payment instruments used to reduce cash flow and ensure the effectiveness of monetary, monetary policy countries. In the course of its functioning, the payment system, like any economic system, can be exposed to the risks of its professional activity. Characteristic risks of the payment system are credit risk, liquidity risk, currency risk, operational, legal and systemic. In the event of risks, an effective management system should be implemented, taking into account all possible scenarios of impact, both micro- and macroeconomic factors, which could cause significant losses at all levels of government. An important aspect of a payment system's risk management policy is that it is adequately assessed. The main stages of assessing the level of financial risks generated by the use of payment systems and their impact on the performance indicators are: 1. Systematization and formalization of financial risk factors generated by the use of payment systems. 2. Constructing a multiple multivariate regression equation, realizing the relation between factor (X) and performance (B). 3. The choice of factor traits to include them in the equation of the economic-mathematical model of standardized regression. 4. Economic interpretation of the results of correlation-regression analysis and their use in the decision-making process. Information base for assessing the level of risks generated by the use of payment systems is the NBU's official data on the activity of Ukrainian banks. It should be noted that the most sensitive to the risks generated by the use of payment systems are: liquidity risk; credit risk, currency risk. Thus, in a context of uncertainty and environmental volatility for banking institutions, the strategic aspect should be to focus on securing competitive positions, determining the acceptable level of risk through the use of the latest economic and mathematical modeling tools, extrapolation forecasting, fuzzy set theory, and choice of payment systems with them should be a strategic priority for each organization.

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Risiko Perbankan, Working Capital Turn Over, dan Profitabilitas

E-Jurnal Akuntansi ◽

10.24843/eja.2021.v31.i07.p10 ◽

2021 ◽

Vol 31 (7) ◽

pp. 1732

Author(s):

Ni Made Bunga Ayu Cahyani ◽

I Ketut Sujana

Keyword(s):

Credit Risk ◽

Stock Exchange ◽

Linear Regression Analysis ◽

Liquidity Risk ◽

Operational Risk ◽

Sampling Technique ◽

Multiple Linear Regression Analysis ◽

Working Capital ◽

Study Population ◽

Turn Over

This study aims to obtain empirical evidence of the effect of credit risk, liquidity risk, operational risk, and working capital turnover on the profitability of banking companies. The study population was 45 banking companies listed on the Indonesia Stock Exchange (BEI) for the 2015-2019 period. With a purposive sampling technique, this study used 17 samples of companies. Through multiple linear regression analysis techniques, the results show credit risk and operational risk partially have a negative and significant effect on the profitability of banking companies. It means the lower the credit risk and operational risk faced, the greater the profitability can be generated. This study also shows liquidity risk and working capital turnover partially have a positive and insignificant effect on the profitability of banking companies. This means that the higher the risk of liquidity and working capital turnover faced, will not be able to increase the profitability of banking companies. Keywords: Credit Risk; Liquidity Risk; Operational Risk; Working Capital Turn Over.

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